Aug. 8 (Bloomberg) -- SoftBank Corp., the Japanese wireless
carrier led by Masayoshi Son, posted a 68 percent drop in first-quarter profit after booking an accounting charge from its stake
in Alibaba Group Holding Ltd. and as subscriber growth slowed.

Net income fell to 77.6 billion yen ($763 million) in the
three months ended June from 244.4 billion yen a year earlier,
which included a one-time gain, the Tokyo-based company said
today. That was the biggest profit drop since a loss in the
March quarter of 2009, according to data compiled by Bloomberg.

SoftBank booked a 63 billion yen loss from associates as
its Alibaba convertible preference shares were treated as a
liability under accounting rules ahead of the Chinese e-commerce
operator’s initial public offering. SoftBank, which is trying to
revive Sprint Corp. in the U.S., is getting squeezed in Japan as
rebates to lure customers are cut and larger rival NTT Docomo
Inc. adds discounted calling plans.

“Domestic competition among mobile carriers is fierce but
I don’t think it will get much worse,” said Kazuyuki Terao,
Tokyo-based chief investment officer of Allianz Global Investors
Japan Co.

SoftBank’s German-traded stock fell as much as 4.5 percent.
Shares of SoftBank fell 3.4 percent to 6,801 yen in Tokyo before
the earnings were announced.

Sprint, acquired by SoftBank in 2013, is struggling to
retain users as the company is said to have scrapped plans to
bid for smaller competitor T-Mobile US Inc.

Sprint Plans

Sprint ended talks with T-Mobile because regulatory
concerns outweighed the potential benefits of combining the
third- and fourth-largest U.S. wireless providers, a person
familiar with the talks said. That means Overland Park, Kansas-based Sprint, which SoftBank bought for $22 billion last year,
has to find another way to win users and compete with Verizon
Communications Inc. and AT&T Inc.

The company is discussing new pricing plans in the U.S.,
Son said today. The billionaire declined to comment on T-Mobile
at a briefing in Tokyo after the earnings.

“The key point from now on is how Son will improve its
U.S. business,” said Satoru Kikuchi, an analyst at SMBC Nikko
Securities Inc. in Tokyo. “I think it was good that he did not
use up his limited resources and money in T-Mobile.”

Sprint named Marcelo Claure, the 43-year-old founder of
mobile-phone distributor Brightstar Corp., as its chief
executive officer, according to an Aug. 6 statement. SoftBank
bought a controlling stake in Brightstar last year.

Slowing Growth

Claure this week said he will look at Sprint’s costs
“extensively” and the company must continue to improve its
network.

SoftBank’s customer growth has slowed from a year earlier.
The company, including its Ymobile unit, added 548,000 net users
in Japan, according to the statement, compared with 947,000 a
year ago. NTT Docomo added 461,000 new customers, which is more
than five times the pace of the year earlier.

SoftBank, founded in 1981, has stakes in more than 1,300
companies, including more than 30 percent of Alibaba. The
Hangzhou-based company is headed toward a U.S. IPO and is valued
at $187 billion, according to the average of analyst estimates.

Alibaba Stake

The Alibaba preference shares will convert to ordinary
stock once the IPO is completed and the company will recognize
gain in the future, SoftBank said today.

SoftBank has concentrated on acquisitions that provide
content for wireless operations, including adding control of
Finnish gamemaker SuperCell Oy for $1.5 billion, as it seeks
growth amid a declining population at home.

The company will seek Internet and telecommunications
opportunities globally, Son said today.